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tv   Closing Bell With Maria Bartiromo  CNBC  April 23, 2013 4:00pm-5:00pm EDT

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i wouldn't get in the way of that trade. >> we'll see. we'll know momentarily. thank you, ben willis, very much. the market finishing just about at the high of the day, as a matter of fact, even with that fake tweet from the associated press. the dow up 151. stand by for much more of the earnings from apple among others on the second hour of the "closing bell" with maria bartiromo. i'll see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. stocks in rally mode once again. investors getting set for big earnings news after the close tonight from apple. take a look at how we're settling out on the street today, and by the way, it was quite an exciting day today for the market. the dow up 150 points, finishing at the high of the afternoon, finishing at 14,718 on the industrial average. the s&p 500, also picking up 16 points on the session. better than 1% to 1,578. the nasdaq composite, up 16
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points. but all was not well throughout the day. it was a fake tweet that shook the market before the close today. but rnearnings from apple are setting up to be a big story after the close as the earnings story continues. david tolisantoli, and our very own jeff cox. david, i guess the question of the day, about 1:00 in the afternoon, 1:30 in the afternoon, there's a fake tweet that comes out because ap's account on twitter was hacked. that basically scares everybody, because it says that there are explosions in washington at the white house, where the president was injured. this was all erroneous, wrong, but nonetheless, the market plummeted 143 points, bounced, and came all the way back in a manner of a few seconds. how do you protect yourself from a 143-point drop in a manner of minutes from that fake tweet?
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>> i don't know how well investors can protect themselves against a decline like that in literally a minute or two. and in fact, some of the program traders got caught, closer to the bottom than the top, so i think that, you know, with a -- especially with something like that that gets washed out pretty quick, you look through to the other side. and that was not far to look across, that quick drop and back up. >> yeah, i mean, i guess you really can't protect yourself. >> i mean, certainly, there are stop-loss sets and other things, but as i said, that could have caused you to just come out of your positions near the low, before it was determined that that was an erroneous tweet and actually stocks went right back up to their trading level prior to that tweet. >> we want to get to some earnings, because at&t is crossing right now, 64 cents a share, right where analysts were expecting. the stock, as you can see, moving in the extended hours. revenue coming in at 31.36.
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we are all waiting, of course, on apple, which is going to be out momentarily. the breaking news in terms of at at&t, is 36 billion. it appears a little light on the revenue side for telephone. but we'll watch this stock and see how it performs certainly after-hours. the knee-jerk reaction is negative on at&t. jeff cox, how are these earnings coming out so far for the first quarter? >> well, maria, they're not looking so great, as we had expected. we're kind of seeing some problems with revenue. a couple of things that i'm looking at here, when we look at apple, you know, one of the prior guests had said, you know, talked about the market and its correlation with apple. you know what, we found out, interestingly enough, over the last eight months, that the markets had no correlation with apple. the market has gone up actually 8% since apple hit its all-time high, which, of course, it's
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dropped about 44% since then. so i think you've got to be real careful about reading too much into apple. as bill has said before, whisper number looking for a much higher number from apple. apple's numbers are very volatile after their earnings reports come out on earnings beats, apple generally goes up about 2.25% the next day, on misses, apple generally falls about 3.6% the next day. so i think if you're an apple investor, obviously, it's such a big company, you're interested in it, but you've got to be real careful. i think the market and apple have kind of gone their own separate ways over the last several months. >> yeah. mike santoli, for a long time, because apple was such a huge part of the nasdaq 100, in terms of the weighting of the nasdaq 100 and the weighting of the s&p 500, the way apple went, the whole market goes. are you expecting that tonight when we get these numbers? >> yeah, not really. actually, i kind of agree with jeff, that basically the market has gone off to new highs without apple, in fact, going against apple's weight. i do think what's interesting, though, is if we see this week's
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kind of reaction to earnings continue with apple, which has basically been, last week people were willing to look on the down said, saying revenues were light, taking an opportunity to sell more than not. this week, i think it's interesting,s with something like caterpillar, where you've had the cyclical part of the markets correcting under the surface of the indexes, and basically people say, okay, it was all priced in. i'm not predicting that's exactly what we're going to see with apple, but it seems like this week is a little bit of a mirror image of last week, where basically expectations are low enough in general that we get a little bit of a pop, more than not. >> let me get to julia boorstin real quick. i want to get some headlines on this at&t report, which is just coming out. and of course, the revenue looks light and the stock is trading down, julia. what can you tell us about the report? >> that's right, maria. even though earnings per share was right in line with expectations, secluding one-time items, revenue did come in light. looking at some of the other data points, wireline consumer
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revenue growth was 2% and u versus revenues was up 35.2%. there are 1.2 million new smartphone subscribers, but there is, of course, the question about churn. there was post-paid churn, it improved to 1.04% and wireless data revenues grew 21% from a year-ago period. and the total wireless revenues and wireless service researches were both up about 3.4%. but in terms of overall revenue, the numbers are slightly light. >> and we're looking at the stock here, trade down 1 2/3 percent on@. the you have to wonder if this is going to be art of the tone. we're waiting for apple. jeff, you're basically saying, look, it's just not going to drag the entire market the way that it did back up at $700 a share. >> no, it doesn't. interestingly enough, if you want to find a stock that really has been correlating well with the stock market, i did a post a couple of days ago about ibm. look back on ibm's earnings on
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thursday. they had the huge disappointment, fell off in after-hours, bill sell-off on friday. didn't do very well yesterday. kind of had a relief rally today, but i think those are the kind of stocks that investors are looking at. ibm has had a remarkable 75% correlation with the market. when apple's had good earnings, the market goes up the next five weeks. when ibm has bad earnings, the market falls. so i think you've got to watch kind of where you're, you know, where you're looking at here. but that ibm thing is telling a story, very interested in the presentation we just got from julia too and i'm wondering how that's going to meld in with apple's earnings as well. >> david, where do you want to be in this market? how do you want to be positioned, knowing what we know, whether it's about the federal reserve, about the global economy, which is sort of bumping along the bottom? >> we're still constructive ton stock market. we're favoring equities both in japan and in the united states. we think we want to stay in the high-growth areas like financials, retail, biotech,
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home builders, and compliment that or diversify with some high dividend-paying stocks that will give us some protection in the volatility. >> all right, we will leave it there. gentleman, thank you very much. we appreciate it. we will keep watching this, obviously. we've got much more ahead on this jam-packed edition of the "closing bell." apple trying to recapture the market magic. the tech behemoth's earnings due out at the bottom of the hour. we'll break them down with our apple corps of specialist. and jim grant is publisher of the widely released newsletter bearing his name. wait until you hear what sector he's hot on right now due to none other than the fed's easy money policy. and they call her the queen of real estate, dolly lens the hottest million-dollar home of all we've been showing you all day. find out if it's a house in your community. you're watching the fircnbc, fi the business worldwide. ♪
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>> good, by the way, i'm not an economist, maria. >> you're right, you're right. but you have the goods to be called an economist. >> i've got a couple of ideas. >> all right, so tell me. >> the world is wide open with respect to credit, right? no credit, no problem.loans, leverage loans accsi he yo maria, is levitating. this is a perfect world for people that deal in equity. and there are two publicly traded private equity and so-called alternative managers that actually offer a margin of safety apart from these opportunities that are part and parcel with very easy money. >> you know, you rarely talk about public stocks in terms of being beneficiaries or gng an impact from the policies out there. which are those private equity firms? >> blackstone, bx, and kkr, and you can guess the ticker, kkr. >> right, kkr. >> both are doing very well in these areas.
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both of them are adding assets under management. i think blackstone had like 98 or 90-something billion in 2009 and now it's got over 200. both are seeing opportunities to sell companies in which they've invested. both, of course, are beneficiaries of extremely low interest rates and accessible credit. and both pay good dividends. both yield around 6% thisyear, will yield around 6% this year or higher. and both trade at multiples of what they call economic net income, which is kind of a massaged price earnings ratio in the high single digits. >> i love this idea. i really do. private equity is certainly doing well in this environment. i'm, i guess, a little surprised that we haven't seen more deals, given the fact that rates are at such low levels. shouldn't we be seeing a whole host of deal flow and deal activity? >> we should, and we may. i guess, the opposite side of a coin of a buoyant stock market is higher evaluations and less attractive targets in the public
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arena. as a stock holder, and i was glad to see blackstone back off from a bid on dell. but, you know, these companies are kind of out of the mainstream. if you're a stock holder, you're actually a unit holder. you get a k-1 form, as if you were a limited partner in almost a hedge fund. the accounting is eccentric, because, well, because gap doesn't quite do these companies justice. so you have to look at this so-called economic net income. and there's this seeming paradox of private equity companies being in the private market. and if private equities are so great, why are they public? there's a lot of bad will, i think, towards these companies, but they offer that thing that is most scarce today in the markets, namely safety. they are actually cheap, especially compared to their public counterparts. these companies have their money locked up for ten years. you don't just take it away from them.
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where the mutual fund companies, the money can and sometimes does walk out the door on a given bad day. they trade these companies, for example, t. rowe price and franklin resources, in the high teens of earnings, or in the case of t. rowe, closer to 20 times. so it seems to me an oddity and an exploitable oddity that the public alternative asset managers, blackstone and kkr are as cheap as they are. >> i like the idea, a lot. let me ask you a bit about what else is going on. the last time you were here was right before this new debate came out, about the fed slowing down the policy, by the beginning of this summer, in 2013. i recognize, it's time to do unemployment and time for the economy. but would you expect the fed to start slowing down the stimulus this year? >> no. >> no? >> fed has said, unless unemployment is better than 6.5%, people have been speculating on the fed's pulling back since they started pulling forward. it seems to me the burden of proof must be on those who c
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contend that the fed is going to do less rather than more. and does it not appear that we have chiefed something like the kingdom of heaven. sovereign bond yields scraping all-time lows in spite of unprecedented central bank activity. why would they stop? it's perfect, yet improving. >> the perfect world. what about gold? i mean, what a -- you must have been just watching that screen, watching gold plummet a week ago. >> yes. >> and thinking, what is going on here. >> the last thing i said to you, the prior time, and you were gracias enough to have me on, gold stocks are really an interesting idea. >> totally lacked. >> but i'm still bullish. i think that gold is the alternative, is the way to get short central banks. it's the way to get long in the alternative to central banking. and gold stocks are cheaper than gold. so i was very, very bullish, indeed. >> so was this just momentum? was it margin calls?
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what do you think -- i mean, because i don't think -- i've not seen a decline like that. >> it seems to me that it was largely the structure of the gold market, meaning the way it was owned, and by whom it was owned and what leverage, rather than anything having to do with the fundamentals of the gold market, which fundamental to me is the institution of managed currency, the central banking. it's aggressive, unprecedented money printing. that to me is a single fundamental of the gold market. as long as that remains in place, it seems to me, you are compelled to look at an alternative if you're serious about the money you have earned, and that, to me, the principal alternative to central banks, in the monetary realm is the ancient monetary asset they can't create. >> and gold trades for a totally different reason than other commodities. you look at what's going on in copper -- >> or grains. >> grains. >> gold, to me, is not a commodity, it's money. but also, notice that there is no p.e. multiple, no yield.
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so it is a price. and therefore, it is subject, in the short-term, certainly, to the vasistudes of anything. >> thanks so much, jim grant. over to eamon javers. a new development in the political intelligence agency here in washington. remember that story from earlier in the month in which a political firm near d.c. called height securities sent an e-mail tip to a number of its wall street trading clients, advising them of some changes in the medicare program. those firms, in turn, traded on that tip. well, now we've got a development in the story, in the case of greenberg troug. they had a partner or lawyer there who was involved in the chain of communications here of this information. they are now saying they're getting out of the business of political intelligence altogether in the back of this situation. let me read you the statement here. they say, we have concluded that
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providing government relation services to an entity in the political intelligence area may lead to misunderstanding and unintended use of those services, even when compliant with legal and ethical standards. height is no longer a client and we will not represent such figures in the future. maria, there's no indication that greenberg traugig or height securities did anything wrong, but we do know a lot of investors here in washington some answers about this situation. >> eamon, we'll keep following that, thank you so much. we're moments away from anticipate's results for the quarter. the technology giant expected to post numbers any minute now. we'll have them for you live and break them down. also ahead, million-dollar homes are not all equal. real estate agent to the stars, dolly lenz, will join me with ore top pick of the bunch we've been showing you throughout the day today. wait until you hear her top pick. back in a moment.
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welcome back. all day here on cnbc, we have been showing you what a million dollars can buy you across the country. we sent six cnbc reporters to six very different real estate markets to check out a $1 million home. the english manor in houston knocked out its other four competitors. now the final round out puts the english manor head to head with a million-dollar cozy cottage in a mystery location. julia boorstin and jane wells taking us on a tour of these two homes. >> this two-story english
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garden-style house built in 2007 sits on just over a tenth of an acre. it has an attached two-car garage, a landscaped yard, and a wrought iron front door and balcony. >> this classic 1950s bungalow comes with a one-car garage, which is used mostly for storage. it sits on a lot that is 134 square feet, in a place where the dirt is probably worth more than the house. >> at the heart of this home is a kitchen with granite countertops a trafrtine floors. >> you make up for the small foot prunt with an open floor milan and this is probably going to be the most popular seat in the house. >> with a gas fireplace here in the master suite, the house has four bedrooms and 3 1/2 bathrooms. the master bathroom as a
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dualhead shower and his and her walk-in closets. >> off the master bedroom, it opens up on to an unusually large backyard for this area and there's even plans to add on. >> just off the living room is a covered patio that leads out to the backyard. it has an outdoor kitchen with a built-in gas grill, a wet bar and a refrigerator. it also has surround sound. all this for $1 million. >> this listing's neighborhood has the number one public rated school system in the region, and while the house itself doesn't have a view, you're one block away from this. the asking price, 1,075,000. >> i'm joined now by super broker, dolly lenz, to crown the top house. so i know from earlier today, julia's english manor is in houston. the cozy cottage -- >> do you have a guest? which coastline it might be on? >> it looks like it's a lot of space, so i'm going to rule out new york, certainly. i have to say somewhere on the west coast.
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>> perfect. west coast, it is. >> okay. >> we are in coronado, which is a suburb of san diego. it is a marvelous beachside town, and the house is tiny, but amazing. >> and more space than we've seen in some of the other homes. >> yeah, you don't -- you know, this particular house, you don't really get a lot of bang for your buck, but it's such a perfect location, a block from the beach. how can you beat that location? >> where do you think the best location is right now across the country? >> these two are probably the absolute toughest. we've got a phenomenal house in houston, no taxes, great unemployment, we've got a great house in coronado, small but fabulous, and better unemployment, 5%. okay? but i have to tell you, how do you overlook the fact that one house is 4,400 square feet in houston and the other house is only 1,000 square feet. >> that's a huge difference. >> yeah. >> so between the english manor or the cozy cottage, the winner
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is? >> the english manor. >> because of the size? >> exactly, it's livability. really, a thousand square feet is tough to live in. people do it, i've done it, but it's tough. >> real estate really coming back. >> this has all been real estate porn all day. >> real estate porn, all right. we will leave it there. i don't know exactly what that means, real estate porn. do you want to explain that real quick? >> people love to watch real estate. >> they do, that i get. >> and porn. >> yeah, that's one of the most successful things on the internet right now. >> exactly. always a fabulous guest and winner, dolly lenz. up next, make or break for apple. the technology giant out any minute now. we'll have those numbers the instant they are released and we'll break them down and show you what the stock does, setting the tone for tomorrow. back in a moment. 2550 opportunities are waiting to be found in faraway places. tdd#: 1-800-345-2550 markets on the rise. tdd#: 1-800-345-2550 companies breaking through. tdd#: 1-800-345-2550 endless possibilities.
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welcome back. apple earnings due out any moment right now. let's get to jon fortt, he's digging through the expectations. as soon as they come out, he will break into the conversation with the actual numbers and we will tell you how the stock did. gene muenster also with us, james bren of compos intelligence. good to see everybody and thank
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you very much for joining us. gene, let me kick it off with you, in terms of what we're expecting on apple, do you think we're going to get a good report? >> no, we're thinking they're going to guide down by about 10% for the june quarter. this is unlike any other quarter i can remember for apple. i have to say, i'm bracing for the worst. >> you're bracing for the worst, wow. if you look at the stock and the way it's been trading, you have to brace for the worst, right? something's in that stock. >> absolutely. and whether the stock actually responds to that or not, but i think you've got to have some tempered expectations kind of in the fall before some of these new products kick off. >> james, what's wrong with apple? >> wall street. >> too high of expectations? >> yeah. there's an echo chamber at wall street and it was started by guys like jim cramer talking about how great apple is. i think they had to fall from the heights that they were at. but there's nothing wrong with apple right now. they are doing fine. >> i've got the apple numbers.
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>> what are the apple numbers, jon? >> the revenue for this quarter is actually coming in above expectations at $43.6 billion, eps, $10.09. guidance, though, disappointing, as gene indicated. he was expecting at the midpoint they were guying to is $34.5 billion and the gross margin, 36 to 37%, which is a little bit below where wall street was looking, from what i have seen, maria. i'll go back through and take a look at the units as well. looks like iphones did 37.4 million units, ipads did 19.5 million units. both of those, pretty strong based on the range where we were looking, as far as what wall street was expecting. i'll have mac units and those things in just a moment. >> jon, you keep looking through those numbers. thank you for that quick flash on apple for us. so, we've got the numbers.
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the actual earnings and revenues, above expectations, but the guidance, as you indicated, gene, right on the money, it is disappointing. you were in the middle of a thought there, james. please continue your thought and any change, given these numbers here. >> yeah, apple is going to derive a great portion of its revenue from the app stores that it has set up. it's got a great eco system and the partners will continue to turn out great software so it's going to run. just can't be too high on apple right now, because you've got other competitors that have caught up. until apple releases some new products, and, you know, the last year and a half makes me wonder, how great new products will be, because they've had to be working on a lot of stuff, because they've kind of stalled, you know, it's just that kind of, they're going to continue to drive revenue, they're going to continue to generate revenue. they're doing fine. it's just, they're not meeting the expectations that were set, you know, i guess, too high. >> yeah, basically what you're
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saying is wall street set them way too high. by the way, the company is increasing its quarter dividend by 15% to $3.05 a share. brian clello of morning star also joining the conversation. brian, you heard the numbers. what's your thoughts on apple here on the heels of this report? >> i thought the march forecast, again, pretty much in line with what was expected. the ipad number was a little strong, but i think we saw a bit of a mixed shift. the guidance is a little weak, in retrospect, we'll find out what the really looks like. if there's a new iphone 5s, perhaps it's not that bad. and the dividend increase that you mentioned, that was in line with what you were thinking, a modest buyback rather than a massive increase. and so relatively in line with what we're thinking. we still think this stock is cheap. the bigger issue is what do they do for an encore with the 5s and future products. >> okay. >> jon, more info? >> yeah. i just want to point out, they're pointing out, $12.5 billion in cash generated,
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bringing them to $145 billion in cash on hand. you already mentioned the dividend. it looks like the gross margin came in at 37.5%, which is in line with the range that they gave. i'm interested in going in and seeing how china performs, specifically. so i'll have that for you in just a moment. >> all right. we will wait for that. gene, let me get your take. you have not reacted to these numbers. what do you make of it? >> it's kind of what we had expected. we're in the lull here, before a big product cycle, kind of on the back half of the year, so the numbers are pretty ugly for june. i think you've got to take the perspective, when people don't like it, there's nothing to like with the june guidance, but i think that's the opportunity here. new products are coming and as far as everything we've measured, there's still going to be a lot of demand for these new products. i know the numbers are ugly, but you've got to keep your focus on what's coming. >> but do you think this move in the stock, having come down from 700, has been warranted? >> well, i think the guide really shows that.
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what's probably implied in that guidance is that iphones are probably going to be down, slightly, year over year in the june quarter. i think based on some of our contacts and the supply chain, that's because this new phone is coming. so i think, yes, the -- a lot of the decline was warranted based on the fact that they're not in a lot of big marks. the emerging market, we still think they're going to come out with a cheaper phone. yes, it's warranted, but there are a lot of good things coming that's going to get this stock moving again. >> maria? >> go ahead, jon. >> i just want to point out, greater china made up 18% of apple's revenue in this quarter. that's up from 12.5% in the previous quarter. of course, their new year's celebration is often a time when a lot of buying happens, but this is an increasing reliance on greater china for revenue. it's now approaching the level of europe, which clocked in at $9.8 billion, greater china at $8.2 billion in revenue for apple in this quarter.
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>> okay. yeah, go ahead. >> yeah, i'll just throw one other thing out there. you mentioned the gross margin guidance was pretty weak there. kind of 36, the street was probe around 38%. i would just say this, i think one thing that's going on there is the mix of iphones, because this product transition is probably really low for the june quarter, and maybe that has a negative impact on margins. so i don't think this is the sky is falling with that negative margin guidance. >> so you think that this is something that you would have expected? >> well, yeah, we had lowered our numbers in anticipation of this, but i think that just because of the timing of these products, i think as iphone sales decline ahead of the next cycle, i think that has a negative impact on gross margins. so this is going to play into the bears' theme, that margins are ultimately going down. but i don't think it's necessarily a long-term indicator, based on their guidance today. >> maria? >> yes, go ahead. you know, apple kind of cannibalized some of its own things. if you take a look at verizon's
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earnings, so many of those devices were not the iphone 5 that were sold. so, and you also take a look at some of its competitors. look for samsung to rise up here, even more, with its product mix coming out. they're just adding more products all the time, and that's something apple needs to take a look at and say, are we going to be a me, too, and cannibalize ourselves or are we going to jump out there and innovate with something totally different? because the iphone 5 really wasn't that much different. >> right, but how do you do that item do you need different leadership? i mean, a lot of people, you know, are wondering if, in fact, given this decline in the stock and the whole buzz about apple possibly losing its edge on innovation, that tim cook is going to be replaced. is that the answer or is that just rubbish? >> i think that's rubbish, myself, because tim has done a very good job leading the organization after a very difficult time. steve, himself, looked for only one or two different models, but you have to look at the fickle
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consumer. the fickle consumer wants different form factors and different sizes. that's why samsung is capitalizing so much right now, going from 3-inch to 6-inch. that's a huge screen difference in a smartphone and something apple really needs to take inside, as a single candy bar form factor what they need or should they actually innovate more? and that's not just tim cook, that's all of the kpsexecutivesd all the members of the marketing organization at apple themselves. >> all right. we'll leave -- >> maria? >> yeah, go ahead. >> there's something else here i think is worth noting. it looks like the average selling price of an iphone came in at $613. that's holding pretty steady, based on the numbers that we've seen before. kind of going against the narrative that competitors are forcing either apple to lower prices or actually forcing more sales of older devices. also, the ipad, average selling price came in at $449. that also suggests that the
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full-size ipad or higher priced skus of the mini are doing pretty well. >> great stuff there. we'll take a short break and come back and continue talking about apple. stay with us, we've got much more about apple. and right on the stock when it reopens, still halted in the extended hours. back in a moment. ♪
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[ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. welcome back. we want to dig a little deeper
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into apple's earnings. we bring back gene muenster and david pearl, steve kobach. good to see everybody. thanks very much for joining us. david pearl, let me get your take on this. we have iphone, 37.4 million units. ipad units, 19.5 million units. numbers coming in at $10.9 a share, but the guidance seems to be disappointing. what's your take on the apple report? >> well, the guidance clearly isn't great, but frankly, if you're a longer term investor than three months, june is pretty much the bottom of their earnings for the next 12 months. we all know tl behere'll be a product cycle in the second half of this year. and even with this slowdown in earnings growth, they're growing at over 10%, which is faster than most of the s&p 500. they're at a 35% discount.
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they just raised the dividend, which is 2.5%. so it's really on the dividend screen. they're buying back more stock and the valuation is just basically incredibly appealing. it's effectively saying, the company is going to be a shrunking asset and we all know, it's cyclical and and they are going to have another product cycle. there are a bunch of new products, we'll see whenever they happen. when you look at this quarter, it shows that consumers still like their products, they didn't discount. if anything, the gross margin decline next quarter is probably mixed shift, as they get rid of older product, rather than discounting of the competition. >> what would you say is the right way to measure the valuation at apple? are you looking at forward earnings, backward earnings? and what's that p.e.? >> definitely forward earnings, but i'm saying, even if you assume that they only grow about 10% forward year from here,
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which really would say they're not going to have much of a product cycle, because they're growing at 10% even at this rate, so assuming they can grow at least 10% on the top line, faster than that. add a 3%ish dividend, and you're going to have, you know, a high teens return. and this is at a 35% discount to the market. let me put it to you this way. utilities are at a value twice as high on a p.e. basis as apple, and they're barely growing a couple percent. so you really have one of the fastest growing companies, even now, in the entire market, at a huge discount, and like i say, we're probably at the bottom of its cylicality, as far as the e. they're going to have all these new products, second half of this year, which have got to accelerate. >> so would you put new money to work, then, in apple right here? >> yeah, and it's price sensitive. we have bought it in the low 400s. and again, if my goal is, what
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will the price of apple be 12 months from now, it's going to be well higher than this, even if the multiple didn't expand, it still should be up double digits, just based on revenue and earnings growth. plus the dividend. >> let me bring steve kobach in here, tech editor of "business insider." steve, what do you want to hear from management after knowing the numbers that we just got? >> i would really like to hear how they respond to these other products from competing companies coming out, such as samsun samsung, they're about to release the galaxy s iv. so expect a lot of questions from analysts during that phone call to have tim cook address that. how are they thinking about other form factors and other types of phones and tablets. >> thoughts on that, gene? >> yeah, i guess from my questions are just about still-emerging markets, how they feel they can attack that market, because it's huge, it's
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40% of the dollars that are spent in smartphones. apple's not even in that market. we need to hear more about that, but usually they don't talk a lot about products. so we hope they will talk about their methodology in terms of returning cash to shareholders down the road instead of us guessing, is there some more sort of formula they're going to be running off of. >> maria, we do know that the new iphones are going to run on the frequencis of china mobile, which is a key issue. they need to get into china, whether or not they have a low-cost iphone, which there's a lot of rumors and photos of such a mock-up. but independent of that, they need to be at china mobile, the largest telecom company in china, the largest carrier. and it looks like they're developing their phones to meet that. so, really, the growth in units is going to be outside the u.s., anyway, and it's, you know, that's their challenge for the next year. >> we'll leave it there, guys. we're waiting for apple to reopen. we want to see how this stock
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welcome back.
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we are waiting on apple to reopen for trading. the stock has been halted in the extended hours. we've been digesting the news. the company, of course, reporting that earnings came in at $10.09 a share on revenue of $43.6 billion. both top line and bottom line were above expectations, but the guidance was not. the guidance was guidance was d. and as you can see, we do have some trades that have the stock trade down. but it is opening as we speak. and it has completely reversed course. let me bring in john ford. john ford, there seems to be some disappointment. but look at this stock go. it's up $20. >> yeah, that's significant. and i think part of the reason why, if we take a look at the big picture, tim cook is selle telegraphing some stability here. you take a look at the increased difficult dind and consider apple has also said that they're going to borrow some money as part of that cash management.
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i think symbolically, apple's got tons of cash, most of it parked overseas. but symbolically this says, hey, we'rebli we're willing to invest. this way they know they'll be able to pay out what they're dedicated to paying out while keeping some kashl on hand at these record low interest rates. as far as average selling prices it looks like we've been over that. it looks like the rivals are not forcing apple to discount or sell older versions of their products. china is an increasingly important market for this country at 18% of revenue in this quarter, even given the pr headaches that apple had there. the mac didn't do as poorly as they expected. idc thought that they'd be down a little bit more significantly. so for the current quarter, things look pretty good. on the next quarter, though,
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with apple's guidance missing expectations on the top line and on margins, there will be questions, maria. >> let me ask. there's a lot of talk about a lot of new products coming out second half of the year. what was said about that? >> well, we'll have to see on the call what exactly they don't say. because of course they never show their hand as far as new products. but sometimes you can get a little bit of a sense of what's coming if they talk about capital spending. because they have to gear up for new products that they have to build. we could be seeing some of that, even though it's hard to know what exactly to read into that. i think this is a year where we're going to see software and services take a little built more of a prominent role. we'll see what tim cook and others have to say about the broader market they're playing in. google, amazon don't seem to have slowed down the ipad at all. expect apple executives to make
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a big deal out of that. >> thank you so much. the stock is up as can you see almost 5%. condition is seeing third quarter revenues of 33.5 to 33.5 billion. you can see the stock is trading higher right now. young brands, the home of taco bell and pizza hut -- >> the stock is popping right now. it's a bit of a relief, rally on the heels of that negative news out of china in terms of avian flu and chicken issues. and they had a downgrade at bank of america. well, they came out with eps 10 cents better than expected. revenue slightly light. let me get a quick break down of a few things. we knew china was going to be bad.
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that didn't change. international was a little weaker than expected and u.s. was plus 2%. worldwide margins down 2.7%. and though the positives here. they said that the negative media attention about what's going on in china has abated and that 10 cent rally has led to this. >> we also had a dividend increase and a huge buyback at apple. let's not forget those things behind this stock move. amigen is reporting. josh, over to you. >> hey, as you said, amigen disappointing here. the big sales of an osteopro sis drug. that comes up short on revenue and venters are selling on that headline. they expect 18.2 billion.
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hit a 522 week high today up some 3 2% this year but falling in the afterhours. >> up next, my thoughts on today's twitter clam at this on the markets and beyond. stay with us. i know what you're thinking...
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and finally, tonight, my observation on technology and its effect. we all know that the world has changed in many ways for the good, thanks to technology. but today another reminder that the impact of technology can actually hit both ways. the big story today, a news agency tritter account was hacked. and a sellout occurred in the middle of the day. the tweet was about a supposed explosion at the white house sent markets reeling.t and it then down 143 when the fake tweet surfaced. then back up when it was reveal thad that tweet was actually false. the bottom line, technology has changed everything. and the train has simply left the station. it is forever changed in terms of the access people have to information, in terms of our
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privacy, in terms. efficiency that technology has helped us along with, but the onus is on every one of us to think before you tweet, think before you open an attachment from one you don't now. think before using technology in any way. you can use easy pass. you can program your car, your washing machine. you can tweet and use facebook and reach millions of people in a nanosecond. but privacy is gone and so your ability to easily sift through information. the internet has made so many things easier for all of us, but as far as individual responsibility in terms of what to believe, what to act on, what is true versus false, that has become much tougher. before we take a look at wall street, apple increased its stock

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